Wired is reporting that Disney has given up on Flexplay’s EZ-D disposable DVD format. The press had a field day getting environmental activists all riled up against the format, but that’s just a sidebar. If consumers found disposable DVDs moderately convenient, then the used discs would end up in the landfill alongside the rest of our disposable society. If the discs were a smash hit, then we’d end up with another color plastic recycling bin for media (which might not be a bad idea anyway. I must throw away hundreds of discs a year, even after AOL stopped mailing them to me twice a day). Since the format didn’t even make a dent, conventional wisdom says that consumers aren’t interested in a disc that self destructs 48 hours after you open the case.
Conventional wisdom is wrong – the product hasn’t been adequately tested to determine anything at all about consumer willingness to adopt one-time-use media. Simply put, the business model here is all wrong. Traditional video rental places won’t carry the product because there’s no return trip to encourage repeat business, and the pricing structure doesn’t fit in with their large scale agreements with Hollywood. Non-traditional locations (supermarkets, convenience stores) can’t sell the product at $5 or $7 each – there isn’t much margin in it for them, and they’re already carrying regular DVDs that sell in or just above that range. Target has an entire line of DVDs for $5.50, including some decent flicks (for example, the Special Edition of Total Recall). Other limited-use entertainment is priced lower: any cable subscriber with a STB can get VOD from their cable provider for $3 to $5 without ever leaving the house (and many digital systems provide for multiple start times or fast forward/rewind capabilities).
So let’s recap: nobody wants to sell this, “real” DVDs are priced at or just above EZ-D, VOD is priced below it. How exactly do you conclude from this that consumers aren’t interested in anything that self destructs after 48 hours?
Somewhat related, The Wall Street Journal had an article today (I got the paper version, no link, sorry) comparing services for legally downloading and watching movies over broadband on a PC. MovieLink and CinemaNow provide downloable movies for $3 to $5, which also self destruct (within 24 hours of hitting “play”). However, there’s a unique value proposition there for anyone who specifically wants to watch movies on their PC (for example, notebook users heading out on the road).